2 ms·

Why 25?

• hueving 9y ago
  Maybe the assumption is that you can earn 4% pretty easily on it and live on that.
• jogjayr 9y ago
  For a longer version: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim... tl;dr You can generally withdraw 4% of your investments on average every year taking into account gains and inflation Assuming you're invested in a broad-based portfolio of stocks, bonds and real-estate. So if you have 25x your annual spending invested, there is a high likelihood of being able to live off just investment returns in perpetuity.